For a long time, taxpayers in Connecticut have been able to fully deduct state and municipal tax payments on their federal returns. Law changes, which took effect in 2017, ended that tax benefit for the time being. As such, the state of Connecticut created a workaround, which allowed residents to make charitable contributions to local organizations so they can claim higher deductions on their federal returns. While this seems a reasonable solution to the problem, the Internal Revenue Service responded by saying such contributions could not be deducted.
Filing taxes can be a pain. No one wants to go through this process every year, and no one wants to pay more than they think they should have to. There are certain things some Connecticut residents may do when completing their taxes to help lower their tax liability. Unfortunately, some of those things may increase one's odds of being audited. What does the Internal Revenue Service look for when deciding who to audit?
When you first started your own company, you may not have anticipated its growth. Now, rather than running a solo operation, you have employees who work for you. While that may make you feel important and proud because it means that your company has grown and seen at least some successes, it also means you have more responsibilities.
Tax fraud is something that the state and federal governments will not treat lightly. Those accused of committing this type of tax crime, if ultimately convicted, could face some severe consequences. A Connecticut man just found this out the hard way.
On July 1, 2019, a bill was signed by the president that is intended to protect taxpayers. Taxpayer rights are not new, but many felt that changes to these rights were long overdue. How will the Taxpayer First Act of 2019 benefit Connecticut residents?